What is a partnership firm?
Partnership firms in India are governed by the Indian Partnership Act, 1932. As per Section 32 of the Indian Partnership Act:
“Partnership is the relation between persons who have agreed to share the profits of the business carried on by all or any of them acting for all.”
Thus there are five elements that constitute a partnership firm:
- There must be a contract,
- Between two or more persons,
- Who agree to carry on the business,
- With the object of sharing profits, and
- The business must be carried on by all or any of them acting for all.
A partnership firm can be registered whether at the time of its formation or even subsequently. You need to file an application with the Registrar of Firms of the area in which your business is located.
Application for partnership registration should include the following information:
- Name of your firm
- Name of the place where business is carried on
- Names of any other place where business is carried on
- Date of partners joining the firm
- Full name and permanent address of partners
- Duration of the firm
Every partner needs to verify and sign the application
Ensure that the following documents and prescribed fees are enclosed with the registration application:
- Application for Registration in the form as prescribed by the Act
- Duly filled Specimen of Affidavit
- Certified copy of the Partnership deed
- Proof of ownership of the place of business or the rental/lease agreement thereof
It may be noted here that the name of your partnership firm should not “contain any words which may express or imply the approval or patronage of the government except where the government has given its written consent for the use of such words as part of the firm’s name”.
Once the Registrar of Firms is satisfied that the application procedure has been duly complied with, he shall record an entry of the statement in the Register of Firms and issue a Certificate of Registration.